John Colantuoni

John Colantuoni asked about the impact of the elimination of federal EV tax credits on used EV demand, how Carvana is adjusting to minimize effects on growth, and the results from Carvana's first physical dealership acquisition, questioning if this signals a future investment area.

Answer

Ernie Garcia, Chief Executive Officer, confirmed that the expiration of EV tax credits shifted customer preference, but Carvana's system naturally adapted, leading to a reduction in EV purchases without a noticeable change in aggregate demand. He reiterated Carvana's belief in EVs for the long term. Regarding the second franchise dealership acquisition, he stated it's too early to comment on results or future investment plans, with the focus remaining on the core business.

John Colantuoni asked about the impact of the elimination of federal EV tax credits on used EV demand, how Carvana is adjusting, and the results from its first physical dealership acquisition, including potential future investment in this area.

Answer

Ernie Garcia, Chief Executive Officer, confirmed that the expiration of EV tax credits shifted customer preference, leading to a reduction in EV purchases, but noted that Carvana's system naturally adapts, and the impact is not noticeable in overall numbers. He reiterated Carvana's long-term belief in EVs. Regarding physical dealerships, he stated it's 'early' and 'premature to comment,' with the focus remaining on the core business.

John Colantuoni asked how Carvana plans to generate the massive incremental consumer demand required to reach 3 million annual units and how it will maintain operational efficiency during such rapid scaling.

Answer

CEO Ernie Garcia explained that operationally, the growth is manageable as it will be spread across an expanding network of facilities, keeping the per-location ramp rate in line with historical achievements. On the demand side, he argued that demand has not been the primary constraint on growth. He believes the company's superior and stable offering, enhanced by the network effects of scale (e.g., better selection, faster delivery), will continue to drive sufficient demand to capture share in the large used car market.

John Colantuoni from Jefferies asked about the key learnings from the sequential ramp of the retail marketplace in Q4 and its potential to become a more meaningful part of unit sales over time.

Answer

CEO Ernie Garcia explained that the marketplace's fundamental role is to create a more efficient channel from a car's previous owner to its next, leveraging Carvana's unique reconditioning and wholesale assets at ADESA sites. He emphasized that building this foundational capability is a long-term project that requires significant work to scale but serves a very large potential market and deepens their vertical integration.

An analyst on behalf of John Colantuoni at Jefferies noted a potential slowdown in ACV's unit volume growth relative to the industry and asked for the drivers of this change, as well as the contribution from commercial units in Q2.

Answer

CEO George Chamoun suggested that annual performance is a better indicator of market share gains than quarterly fluctuations. CFO Bill Zarella added that their guidance for mid-teens share gains for the year is intact, even with a more conservative flat-to-down market assumption. Regarding commercial, Chamoun reported they are in the very early stages but celebrated a key milestone: selling the first vehicle on their new commercial platform at the Houston greenfield location.

John Colantuoni asked if the implied mid-teens organic unit growth is a normalized level for ACV, what key vectors could unlock further growth, and for perspective on the competitive threat from Carvana's ADESA Clear.

Answer

CFO Bill Zerella confirmed the mid-teens unit growth assumption is consistent with recent years' market share gains. CEO George Chamoun identified two potential upside vectors: a better-than-expected wholesale market and faster adoption of ACV's new value-added services like AI-powered pricing tools. On competition, Chamoun emphasized ACV's position as a neutral, independent partner with a broad suite of offerings, suggesting dealers will prefer partnering with them over competitors like the one mentioned.

John Colantuoni requested an update on geographic expansion into newer markets like Texas, the timeline to achieve market density, and the current status of previously discussed plans for entering Canada.

Answer

CEO George Chamoun highlighted Texas as a key success story, with some of the company's highest year-over-year gains, demonstrating successful expansion beyond its East Coast stronghold. He noted that new products like ClearCar are aiding this expansion. Interestingly, he revealed that while Canada was an early consideration, ACV has been pulled into European markets first by partners and will pursue an asset-light, self-inspection model there.

John Colantuoni asked about Airbnb's approach to building inventory for Experiences, specifically how it balances curating high-quality, differentiated supply with the need to build scale.

Answer

CEO Brian Chesky emphasized a strong focus on quality, stating that every Experience is vetted before going live, resulting in a higher average rating (4.93 stars) than homes (4.8 stars). He explained that Airbnb uses a sophisticated vetting operation with third-party vendors to check credentials and licenses, a process he believes is scalable and crucial for building customer trust.

John Colantuoni asked about the trend of business momentum throughout Q1 and into April, and how growth in expansion markets this quarter compared to the strength seen in the previous quarter.

Answer

CFO Ellie Mertz described Q1 as volatile, with a strong January followed by a soft February that rebounded in March. She noted that while headlines are volatile, this pattern shows consumers may pause but still follow through with bookings. For expansion markets, she highlighted that Latin America's growth accelerated from 2024 and its Q1 growth was above the prior year's Q1, demonstrating sustainable momentum from localization efforts.

John Colantuoni asked how Airbnb plans to evolve its search and discovery to layer in new services without hurting conversion on accommodations. He also asked about the opportunity to use new services to create a flywheel effect for customer acquisition and lifetime value.

Answer

CFO Ellie Mertz explained that new offerings will be merchandised mindfully based on the guest journey, personalization, and timing to avoid disrupting the core booking flow. She confirmed that a key criterion for new businesses is their ability to create a flywheel, making the core offering better, encouraging more frequent bookings, and increasing overall app engagement.

John Colantuoni asked about the relaunch of the Experiences offering, specifically questioning the expected pace of expansion, its scalability, and the level of investment planned for technology and marketing to support it.

Answer

CEO Brian Chesky asserted that the offering can be both unique and scalable, noting that most of the foundational technology investments to create an extensible platform have already been made. He explained that marketing will be integrated under the main Airbnb brand as a 'branded house,' avoiding the need for major, separate campaigns. While there will be investment, he stressed it would not require the company to go 'deep into the red.'

John Colantuoni asked about the drivers behind the sequential improvement in Etsy's GMS trajectory and the rationale for managing the core marketplace to a high-twenties EBITDA margin, which is below the prior 30%-plus target.

Answer

CEO Josh Silverman attributed the GMS improvement to enhanced app experiences, personalized owned marketing channels, increased paid social investment, and PLA martech improvements, alongside stable consumer spending. CFO Lanny Baker clarified that the high-twenties margin reflects near-term investments in growth initiatives like the app and machine learning, and that the long-term profitability outlook for the core marketplace remains strong and highly attractive as growth returns.

John Colantuoni asked which consumer experience improvements are expected to contribute most to GMS recovery and for examples of investments focused on generating near-term GMS wins.

Answer

CEO Josh Silverman outlined a dual approach. For near-term GMS, dedicated 'value capture' squads will focus on conversion driving, including optimizing newly launched surfaces and applying ML to lower-funnel marketing. For the medium-term, he emphasized improving browsing experiences to gather more user data for personalization and enhancing quality signals using LLMs to identify and elevate the most unique and artisanal items on the platform, which he believes will drive frequency and loyalty.

John Colantuoni asked about the drivers behind the increase in average order value (AOV) across U.S. restaurants, international, and grocery. He also requested clarification on how much foreign exchange (FX) is impacting the GOV guidance.

Answer

CFO Ravi Inukonda attributed the AOV increase primarily to a mix shift toward the growing grocery business, where basket sizes are increasing as consumers become more habituated. He noted that restaurant AOV has been stable. For FX, he stated there was a roughly 1% impact on year-over-year GOV growth in Q1, and some impact is embedded in the Q2 guidance.

John Colantuoni inquired about the drivers of sales and marketing leverage, particularly the contribution from Dasher incentives, and its potential for future margin expansion. He also asked about the importance of large-basket weekly grocery shops for long-term profitability.

Answer

CFO Ravi Inukonda explained that S&M leverage stems from product improvements that boost Dasher and consumer retention, reducing acquisition costs, and expects this trend to continue at a slower pace. CEO Tony Xu stated that large grocery baskets are 'cherries on top' and not required to make the grocery business model work, thanks to DoorDash's low-cost logistics structure. Ravi Inukonda added that the company's advantage is its ability to serve all basket sizes profitably.

On behalf of John Colantuoni from Jefferies Financial Group Inc., Vincent Kardos asked for details on the improvements to the inspection process and their financial impact, as well as the margin profile and tariff risk for the growing Renovate business.

Answer

CEO Brian Bair explained the inspection process is faster because customers can now instantly schedule appointments at their convenience using a wider pool of internal and external talent, which is increasing engagement and conversion. Regarding Renovate, CFO Peter Knag reiterated its 20-30% margin profile, which is being maintained as it scales. Brian Bair added that they are not yet seeing a significant impact from tariffs on renovation costs.

John Colantuoni inquired about the specifics of Offerpad's expanded buy box, the systems and processes providing confidence for faster growth, and details on the simplified consumer offer process.

Answer

CEO Brian Bair explained that the company is expanding its buy box to higher price points, from a previous focus of $200k-$500k to a new range of $250k-$700k, to target move-up buyers with existing equity. Bair connected this to a new, streamlined offer process where customers receive a price range in minutes and can instantly schedule an inspection. This enhancement provides Offerpad with better visibility into the homes it acquires, supporting higher price points and creating opportunities to discuss other products with sellers in person.

John Colantuoni of Jefferies asked for more detail on the incrementality of Max subscribers and whether the tier's gross margin profile has improved with the release of more cost-effective AI models.

Answer

CFO Matt Skaruppa explained that Max's growth is driven by both new-to-paid users and a significant number of upgrades from existing subscribers. He confirmed Max remains a lower gross margin percentage product but delivers higher gross profit dollars, and its margin profile is expected to improve throughout the year as AI costs decline and optimizations are implemented.

John Colantuoni asked how the growing focus on intermediate English learners is expected to evolve Duolingo's approach to marketing and its flexibility for product reinvestment.

Answer

CEO Luis von Ahn explained that the primary challenge is shifting the long-standing word-of-mouth perception that Duolingo is only for beginners. This requires evolving marketing tactics beyond viral social media stunts to more directly communicate the depth of advanced content. CFO Matt Skaruppa added that the company is increasing absolute marketing spend to support this while still achieving operating leverage on the marketing line.

John Colantuoni asked for perspective on the relative contribution of various advertising drivers over the next 1-2 years and for an update on the progress of scaling Dynamic Product Ads (DPAs).

Answer

COO Jen Wong identified three key growth drivers with significant runway: the scaled channel (SMBs), performance objectives, and international markets. On DPAs, she noted they are in early beta testing but are showing encouraging results, with a 90% ROAS gain in tests, and the focus is on improving ML models and product catalog ingestion.

John Colantuoni of Jefferies asked if conversation ads are still creating pricing headwinds and inquired about the impact on pricing from the adoption and reception of newer premium conversation ad formats.

Answer

COO Jen Wong acknowledged that the newer conversation placement still has less demand than the feed, which can affect pricing. However, she noted that tools like multi-placement optimization are helping grow demand by fluidly optimizing advertiser spend across surfaces to achieve outcomes, familiarizing advertisers with the unit's performance.

Asked about the economics of the Redfin Next model, including the mix of lead sources and its impact on margins, and for more detail on the unexpected transition costs.

Answer

The mix of lead sources under Redfin Next is as expected, and the company has already made adjustments to the plan to align with its economic targets. The focus is on maximizing profit from Redfin-generated leads. The higher-than-expected transition costs in Q4 were due to program mechanics and base costs being higher than modeled during the national rollout.

Chris, on behalf of John Colantoni at Jefferies, asked about the expected margin profile of the combined business after integrating RepairPal and requested a more granular breakdown of the weakness within the RR&O category.

Answer

CFO David Schwarzbach stated that RepairPal was approximately breakeven on $30 million in revenue and that Yelp aims to leverage its SEO/SEM expertise to drive growth, with more details to come post-closing. COO Jed Nachman clarified that the weakness in RR&O is broad-based across restaurants, retail, and other subcategories due to similar macro pressures.

John Colantuoni inquired about the lead conversion performance of Real-Time Touring compared to other connection types and whether its rollout is accelerating agent transitions to the Flex model, potentially boosting revenue.

Answer

CEO Jeremy Wacksman stated that while specific conversion data for Real-Time Touring isn't broken out, touring customers in general convert at three times the rate of other leads. He noted that Real-Time Touring will exceed 25% of connections by year-end and is contributing to overall conversion improvements. Wacksman clarified that Real-Time Touring is available across both payment models and is focused on identifying high-intent customers for top-tier agent partners.

John Colantuoni inquired about Real-Time Touring, asking for specifics on its lead conversion rates compared to other connection types and whether its rollout is driving more agents to the Flex model, creating a revenue tailwind.

Answer

CEO Jeremy Wacksman explained that while specific conversion data for Real-Time Touring isn't broken out, touring customers in general convert at a 3x higher rate. He noted Real-Time Touring is on track to exceed 25% of connections and is available across both Flex and traditional payment models, emphasizing its primary role is to identify high-intent customers for top-performing agents.

John Colantuoni of Jefferies sought to understand the Q3 residential outlook, questioning the market growth assumption and why Zillow's guidance appeared to imply underperformance relative to the market.

Answer

CFO Jeremy Hofmann clarified that Zillow's customer base indexes more toward the mortgage market, which is underperforming the broader housing market. He emphasized focusing on the company's consistent, significant outperformance versus the industry over the last two years and reiterated confidence in achieving double-digit total company revenue growth for 2024, driven by strong execution of their strategic initiatives.

John Colantuoni asked for the specific impact of the booking window extension on Q3 room night growth and inquired about the investments being made to regain market share in North America.

Answer

CFO Ewout Steenbergen stated that the company does not quantify the booking window's impact but described it as a 'slight benefit' in Q3. He noted that Booking Holdings believes it grew faster than the North American market in Q3, driven by investments in listings, alternative accommodations, brand marketing, and product enhancements, positioning itself as a challenger in the market.